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WHY stock brokers should do Real Estate broking?
Agenda:
•Stock broking current scenario •Why real estate broking? •What is a real estate broking business?•What are the new trends in this business?•How will real estate broking look in next
10 years?•What makes a profitable business?•The RE/MAX Concept.
What is the number 1 threat to a Stock brokers’ business?
Stock broking current scenario
•Average Daily volume falling ▫From a peak of 14,000 crore to ?
•No Differentiation between brokers •Value addition to customer •Internet broking eating in to market share
Why real estate broking?
•Net worth share in asset class in %:▫______ stocks (at current Prices) ▫__________is in Real estate▫Gold , Bank deposits, Mutual Funds,
Insurance, etc. •Name 5 National stock broking companies •Name 5 Financial institution •Name 5 Real estate broking companies
Some comparisons
Comparison as an Asset Class
Equity Real Estate
• Highly volatile • Liquid • Coupled with foreign
markets• Market prices determined
by handful of FIs
• Stable • Not easily liquid able• Relatively decoupled. • Market prices determined
by local economies and domestic conditions
Stock Broking Real Estate Broking
• No local knowledge necessary
• Exchange is your network• Low commission per
transaction
• Local knowledge very much important
• You require the network to be built
• High commission per deal
Revenue per transaction
Stock Brokers Real Estate
• Average transaction size of Rs. 20,000
• Say a 0.50% commission • Total revenue: Rs.100• So you need 2,000
transactions to get 2 lakhs.
• On a deal of 1 crore:• A commission of 2% • Total Revenue: 2 lakh
Return on Time invested
Stock Broking Real Estate Broking
• Upto the minute updates on the stocks you trade
• Highly disciplined job of 9 to 4
• Back office work there after
• Less updates to track• Work on your own
schedule • Less number of
transactions so less back office work
• Number of brokers in Ahmedabad: Approx. 10,000 active.
• Number of deals : 10,000-12,000 registrations a month
• Estimate of primary deals being done by brokers: 50%- 60% (increasing as number deals reduce)
• Investors from all India have invested in Gujarat
• With Tata Nano, Ford, Peugeot setting up plants in Gujarat, real estate is going to be in demand
• Migration of people to cities is set to grow: 70% of India still stays in villages.
• Gujarat’s GDP is growing faster than the rest of India since 3 or more years.
• 3 of the top 100 growing cities in world are in Gujarat
• Number 1 city : Ahmedabad
• Best state: Gujarat in Real estate transparency survey 2011
What does a buyer want?
•Inventory •Agent time •Guidance•Saving of his time•Quick Closure
What does a seller want?
•More genuine buyers•Get best price for his property•Liquidate at the earliest•Agent’s time •Guidance of valuation•Relevant buyers consider his property
Why a broker cannot satisfy?
•Getting and retaining best employees •Training •Advertisement Budget•No Surety of Income•Limited budget for Running costs•Network
Why employees don’t stay?
•Employer gets the lion’s share of income•Boss gives little value addition to each
deal once the employee becomes experienced
•Lack of independence •Lack of Personal Identity •Limited office growth
Get access to HNI/NRI clients?• Get relevant training and provide good service.• Get properties which they would prefer:
▫ 100% white for NRI ▫ Give a good ROI for HNI
• Provide a experience to client to gain trust• Use technology extensively
How to increase deals?• Give more options to buyers• Employ more agents to serve the customer
better• Use technology to increase the viewers of the
property
Technology: How important?
Example of A listing •Property with an excellent view over
looking a river, sea and a hill.•Very upmarket locality. •3 bed room, fully furnished, good wood
work.•Parking for 2 cars.
Technology: How important?• Buyers require more information e.g.: floor
plan, elevation photos, views, amenities etc.• Cost of petrol increases so buyers prefer to
see properties over internet and short list rather than visit each and every option
• Buyers don’t have time • Buyers can be outside city or even country. • Buyers want to share information with others
What are the new trends in this business?• Role of Media
• Resale properties
• Dependence on agents as plethora of options emerge
• Technology
• Foreign investments : both ways
• White money
Real Estate broking will follow the foot steps of organized stock broking
• Earlier it was dominated by Mumbai based firms
• Then regional stock exchanges • NSE Came in to operation :
▫Technology ▫Risk Management ▫Franchising ▫Research
• Customer retention becomes the only important factor in determining your success.
What makes a profitable business?
Which business is more profitable?
More number of property options for customers
OR Less number of property
options for customers
Which business is more profitable?
A well trained agent OR
Untrained assistants / employees
Which business is more profitable?
Latest technology to market their properties
OR Doesn’t use technology to market their properties
Which business is more profitable?
A large international network
ORA stand alone operation
Which business survives longer?
With lower recurring costOR
When recurring cost is high
Which business is more profitable?
Is in Business since long OR
Just opened
Which business is more profitable?
Running based on a proven concept globally
ORA office started without any proven
concept
Which business is more profitable?
A system driven modelOR
A person driven model
Verious Real estate company enter in to indian Real estate broking Business
Giving your business the RE/MAX leverage
Established in Denver, Colorado (USA) in 1973 by –
Dave
Liniger
The only internation real estate broking
company still owned and operated by the
original promoter
- Real Estate Maximums
RE/MAX is the most successful network in the history
of the real estate industry
RE/MAX is the most successful network in the history
of the real estate industry
RE/MAX did house sales of more than
$500 bn.
If RE/MAX was a company, we would
be bigger than WALMART
GLOBAL RECOGNITION
Brand Name Recognition
RE/MAX is #1The most recognized logo in real estate
39
Business Model:
A business model working successfully in more than 7000 offices and created millions of entrepreneurs
worldwide
Only real estate company to
feature in the book “50
Companies That Changed the
World” by Howard Rothman
World’s largest Real Estate brokerage franchising network…!
Ability to do business in more than 88 countries
OPERATING IN 105 REGIONS IN 88 COUNTRIES
Network...
88 Countries 7000+
Offices 100,000+ Agents 12,00,000+
Transactions
Network…
23 Regions 100+
Offices 450+ Agents
8 Transactions/day
Education & Training
More than 25,000 hours of training in India done
Conferences & Conventions
Technology
www.remax.com
1 Million Unique Visitors per month
World’s largest visited real estate website
Tools To Grow Your Business
Offices in Ahmedabad1 Mr. Vivek Parikh Satellite RE/MAX Metro
2Mr.Nishant Makhija and Mr. Vinod
Makhija Vastrapur RE/MAX Real Estate Services
3 Mr. Anand Choksi Satellite RE/MAX Advantage
4 Mr. Ankit Patel, Memnagar RE/MAX Castlemore Realty
5 Tushar Gandhi and Mr. Hemant Gandhi S.G. Highway RE/MAX Vintron Gold
6 Nikul Patel Sardar Patel RE/MAX Achievers
7 Mr. Manish Shah and Mr. Upendra Shah Maninagar RE/MAX Real Estate Experts
8 Mr. Nirav Vakharia/Mr. Harit Parikh Stadium RE/MAX REALTY SOLUTIONS
Broker Owners Of Ahmedabad
Achievements
RE/MAX Bangalore Franchise does landmark transaction
Achievements
•Lodha World One
Achievements
Thank You